Nigeria Seeks $2 Billion Chinese Loan for Nationwide “Super Grid” Project

Nigeria is in talks with China’s Export-Import Bank for a $2 billion loan to finance a new “super grid” aimed at addressing chronic power shortages and driving industrial growth.

Minister of Power Adebayo Adelabu disclosed this during the 31st Nigerian Economic Summit in Abuja on Monday, explaining that the proposed transmission network will connect the eastern and western regions — where most of the country’s industrial users are concentrated.

Adelabu said the project is central to the government’s plan to decentralize power generation and reintegrate large-scale industrial consumers who abandoned the unreliable national grid.

“It’s part of plans to decentralize power generation in Nigeria and get the heavy commercial users that left the power grid because of its unreliability to return,” he stated.

Fixing a fragile grid

Nigeria’s electricity system remains one of the biggest obstacles to economic growth. Although the country has an installed capacity of 13 gigawatts, it delivers barely a third of that to over 200 million people, with frequent grid collapses deepening the crisis.

By comparison, South Africa, with just a quarter of Nigeria’s population, has around 70 gigawatts of installed capacity. The persistent shortfall has forced industries to depend on self-generation, which now accounts for nearly half of all power consumed nationwide.

Adelabu noted that the new super grid would improve transmission efficiency and channel more power to industrial zones. He added that the Federal Executive Council (FEC) has already approved financing for the project.

Part of Tinubu’s reform agenda

The initiative aligns with President Bola Tinubu’s wider economic reform efforts — including the removal of fuel subsidies, tax reforms, improved oil production security, and financial sustainability in the power sector.

The Minister also revealed that recent tariff adjustments for urban consumers have improved industry revenues by 70% in 2024, with earnings projected to rise another 41% to N2.4 trillion ($1.6 billion) this year.

Background

Nigeria’s national grid has suffered repeated collapses due to inadequate generation, transmission bottlenecks, and aging infrastructure.
According to data from the Nigerian Electricity Regulatory Commission (NERC), several partial and total collapses occurred in 2024 — including a nationwide blackout in September, the second of the year.